RNG Powering the Global Natural Gas Truck and Bus Market, 2020–2030

RNG Powering the Global Natural Gas Truck and Bus Market, 2020–2030

Governments to Develop/Expand the Fueling Infrastructure Presents Growth Opportunities

RELEASE DATE
20-Jul-2020
REGION
Global
Deliverable Type
Market Research
Research Code: K3A1-01-00-00-00
SKU: AU02010-GL-MT_24485
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Description

The medium duty (MD) and heavy duty (HD) truck and bus market will show strong recovery globally after a major dip in 2020 due to the COVID-19 crisis which will affect production as well as sales across regions. The crisis will also have a profound effect on the adoption of natural gas (NG) powered truck and buses, with China and Europe witnessing almost a 60% and 50% decline in MD-HD truck sales respectively in 2020. North America (NA) which posted historic high MD-HD truck sales in 2018 and 2019 will also be hit considerably. With China already recovering from the crisis and the push by governments in Europe and NA to revive the economies, it is expected that a positive impact will be felt on the NG market after 2021.

The global NG MD and HD truck market is expected to grow to ~490,000 units in 2030 with a compound annual growth rate (CAGR) of 11.6%. India and South America will be the highest growing markets between 2019 and 2030 with a CAGR of 30.2% and 31.8% respectively.

Stringent emission regulations, volatility in crude oil prices, and technology development which effectively reduce the total cost of ownership (TCO) of NG commercial vehicles (CVs) are some of the key factors driving the adoption of NG as a fuel for these vehicles. Abundance of NG reserves and LNG trade will lead to low prices of NG in Europe and North America. Asia will also benefit as there will be an oversupply of the fuel. In China, NG pricing is transforming from a cost plus pricing approach to market pricing, with the creation of gas spot trade exchanges at Chongqing and Shanghai. Renewable Natural Gas (RNG) produced from a number of sources will be the key to increasing the adoption of NG vehicles. Some countries in Europe are already on the way with more than 90% of the NG vehicles running on RNG. Use of RNG in NG vehicles is expected to increase to almost 50% by 2030.

Compressed Natural Gas (CNG) will be the most preferred type of NG fuel; however, most NG trucks in China run on Liquefied Natural Gas (LNG), which is most profitable for long-haul applications. Spark ignition (SI) technology will boost its market position due to its low cost and wide installation base, thus facilitating future development. High Pressure Direct Ignition (HPDI) technology will also increase its penetration into LNG CI trucks in the long-haul segment.

The NG MD and HD truck & bus market also faces stiff competition from the electric equivalents. MD and HD truck OEMs are making giant strides towards electrification after being slow and reticent in adopting the technology earlier. The adoption of NG powertrains is expected to show high growth rates till 2025, after which it is expected to drop. The global MD and HD bus market faces stiff competition from electric buses, especially in China. With many European and US bus OEMs looking at the electrification route, these regions will also witness slower growth rates during the forecast period.

Author: Vineeth Purushotham

Table of Contents

Executive Summary—Key Findings

Global NG CV Market—2030 Outlook for Key Regions

OEM New Dedicated Platforms—Powertrain Flexibility Comparison

Global NG CV Market Snapshot

Research Scope

Research Aims and Objectives

Key Questions this Study will Answer

Research Background

Research Methodology

Key OEMs and Suppliers Compared in this Study

Vehicle Segmentation

Definitions

CV Industry Ecosystem—Focal Range of This Research Deliverable

Key Factors Impacting the NG CV Market

Legislative Factors—Analysis

Economic Factors—Analysis

Use Case Analysis—NG Truck

Use Case Analysis—NG Bus

Global MD & HD Truck Market—Unit Shipment Forecast by Region

Global MD & HD Truck Market—Regional Split

Global MD & HD Bus Market—Unit Shipment Forecast by Region

Global MD & HD Bus Market—Regional Split

Shale Reserves and Production Snapshot

Shale Gas and its Impact on NG Adoption

NG Trade by Region

Global NG Incentives Landscape

Growing Prominence of RNG

RNG—Considerable Reductions in Well-to-Wheel Emissions Even Compared to Electric Alternatives

RNG as a Transportation Fuel across the Globe

NG Price Dynamics

NG Price Breakup

Diesel–NG Price Differential

Global NG CV Market Snapshot

Global Regulatory Outlook

Global NG Truck & Bus Market—Key Driving Factors

COVID Impact on MD- HD Truck Sales in NA, Europe & China

Global NG Truck Market—Unit Shipment Forecast

NG MD-HD Truck Market—Regional Unit Shipment Split by Fuel Type

Global NG Bus Market—Unit Shipment Forecast

MD-HD NG CV Technology Mapping by Region

MD-HD Truck Primary Application Technology Mapping

NG OEMs and Engine Supplier Activity by Region

China—Key Influencing Trends

China—NG Reserves

China—NG Station Overview

China MD-HD NG Truck Market—Unit Shipment Scenario Analysis

China MD-HD Truck Market—Powertrain Penetration

China MD-HD NG Truck Market—NG Fuel Type and Ignition Technology

China MD-HD NG Truck Market—OEM Product Portfolio

China MD–HD NG Bus Market—Unit Shipment Scenario Analysis

China MD-HD Bus Market—NG Fuel Type and Ignition Technology

NA—Key Influencing Trends

CARB Ultra-low NOx Regulations—Impact on Powertrains

NA MD–HD NG Truck Market—Unit Shipment Scenario Analysis

NA MD-HD Truck Market—Powertrain Penetration

NA MD-HD Truck Market—NG Fuel Type and Ignition Technology

NA MD-HD NG Truck Market—OEM Product Portfolio

NA MD–HD NG Bus Market—Unit Shipment Scenario Analysis

NA MD-HD Bus Market—NG Fuel Type and Ignition Technology

Europe—Key Influencing Trends

Europe—Shale Gas Reserves

Europe—NG Fueling Infrastructure Overview

Europe MD–HD NG Truck Market—Unit Shipment Scenario Analysis

Europe MD-HD Truck Market—Powertrain Penetration

Europe MD-HD Truck Market—NG Fuel Type and Ignition Technology

Europe MD-HD NG Truck Market—OEM Product Portfolio

Comparative Analysis of Major European Countries

Europe MD–HD NG Bus Market—Unit Shipment Scenario Analysis

Europe MD-HD Bus Market—NG Fuel Type and Ignition Technology

Indonesia—Key Influencing Trends

Japan—Key Influencing Trends

Australia—Key Influencing Trends

Russia—Key Influencing Trends

Operational Cost/Mile Comparison—Assumptions

Diesel, NG, and Electric Truck Weight Benchmark

NG Truck—Price, Fuel, and R&M Breakdown

Diesel, NG, and Electric Truck Operational CPM Comparison

Operational Cost/ Mile ($/Mile)- Diesel vs. Electric vs. NG

Growth Opportunity 1—Need to Expand Product Portfolio

Strategic Imperatives

Future Outlook—2030

Legal Disclaimer

Abbreviations and Acronyms Used

Learn More—Next Steps

Market Engineering Methodology

List of Exhibits

List of Exhibits (continued)

List of Exhibits (continued)

List of Exhibits (continued)

The medium duty (MD) and heavy duty (HD) truck and bus market will show strong recovery globally after a major dip in 2020 due to the COVID-19 crisis which will affect production as well as sales across regions. The crisis will also have a profound effect on the adoption of natural gas (NG) powered truck and buses, with China and Europe witnessing almost a 60% and 50% decline in MD-HD truck sales respectively in 2020. North America (NA) which posted historic high MD-HD truck sales in 2018 and 2019 will also be hit considerably. With China already recovering from the crisis and the push by governments in Europe and NA to revive the economies, it is expected that a positive impact will be felt on the NG market after 2021. The global NG MD and HD truck market is expected to grow to ~490,000 units in 2030 with a compound annual growth rate (CAGR) of 11.6%. India and South America will be the highest growing markets between 2019 and 2030 with a CAGR of 30.2% and 31.8% respectively. Stringent emission regulations, volatility in crude oil prices, and technology development which effectively reduce the total cost of ownership (TCO) of NG commercial vehicles (CVs) are some of the key factors driving the adoption of NG as a fuel for these vehicles. Abundance of NG reserves and LNG trade will lead to low prices of NG in Europe and North America. Asia will also benefit as there will be an oversupply of the fuel. In China, NG pricing is transforming from a cost plus pricing approach to market pricing, with the creation of gas spot trade exchanges at Chongqing and Shanghai. Renewable Natural Gas (RNG) produced from a number of sources will be the key to increasing the adoption of NG vehicles. Some countries in Europe are already on the way with more than 90% of the NG vehicles running on RNG. Use of RNG in NG vehicles is expected to increase to almost 50% by 2030. Compressed Natural Gas (CNG) will be the most preferred type of NG fuel; however, most NG trucks in China run on Liquefied Natural Gas (LNG), which is most profitable for long-haul applications. Spark ignition (SI) technology will boost its market position due to its low cost and wide installation base, thus facilitating future development. High Pressure Direct Ignition (HPDI) technology will also increase its penetration into LNG CI trucks in the long-haul segment. The NG MD and HD truck & bus market also faces stiff competition from the electric equivalents. MD and HD truck OEMs are making giant strides towards electrification after being slow and reticent in adopting the technology earlier. The adoption of NG powertrains is expected to show high growth rates till 2025, after which it is expected to drop. The global MD and HD bus market faces stiff competition from electric buses, especially in China. With many European and US bus OEMs looking at the electrification route, these regions will also witness slower growth rates during the forecast period. Author: Vineeth Purushotham
More Information
Deliverable Type Market Research
No Index No
Podcast No
Author Vineeth Purushotham
Industries Automotive
WIP Number K3A1-01-00-00-00
Is Prebook No
GPS Codes 9800-A6,9B01-A6,9963-A6,9AF6-A6